Very brief points borrowed from Shiller's "Irrational Exuberance"
- Most media channels find and define news stories that are interesting with great word-of-mouth potential. Whenever possible, they re-define an ongoing story so that it encourages their audience to remain steady customers.
- They cultivate debates among experts on issues so that it seems there are experts on all sides of the issue. The debates are cultivated on issues about which there audience themselves are confused.
- Reporting on market outlook: superficial opinions are preferred to in-depth analysis by media to make issues of good word-of-mouth potential.
- Record Overload: The media stresses on data which can be interpreted of setting new records. Many reporters while covering for ‘one day price changes’ may report in points rather than percentages so as to set a new record. This only adds to the confusion people have about the economy.
- Statistical research has proved that big price changes have no useful association with news headlines.
- News stories may be tagged to price changes even when their actual reporting did not have considerable effect on stock prices.
- Absence of significance news has been reported prior to large price changes- news rather acts as a initiator of chain of events that fundamentally change the public’s thinking about the markets.
- News functions as the precipitator of (public’s) attention cascade. The new media can strongly foster feedback from past price changes to further price changes. It can also foster another sequence of events, referred by Shiller as attention cascade.